TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 398
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....ally made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by M/s. The TATA Power Company Limited, the, applicants are as under: 2.1 The applicant having its office at 34, Sant Tukaram Road, Carnac Bunder, Mumbai - 400009 is engaged in power generation, transmission and distribution to the customers and as a part of its employee policies, it provides certain facilities to its employees such as insurance, transport, etc. 2.2 The applicant has an arrangement with New India Assurance Co. Ltd. (hereinafter referred to as "insurance company") for providing insurance cover for its employees, in pursuance of which, the insurance company issues a master insurance policy to the applicant for providing group insurance to the applicant's employees. 2.3 Further, the applicant has formulated a 'Health & Wellness Policy' for the welfare of its employees under which, its employees can opt for an....
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....ion, and includes the activities mentioned in Schedule-I without a consideration. 2.9 SI. No. 2 of Schedule 1 to the CGST Act states that supply of services between 'related persons' shall be treated as supply even if made without consideration, provided such supply is made in course or furtherance of business. 2.10 As per explanation to section 15 of the CGST Act, employer and employee are deemed to be related persons. 2.11 Further, SI. No. 1 of Schedule III to the CGST Act deals with services provided by an employee to the employer and states such transactions shall be treated neither as supply of goods nor of services and. The said 51. No. 1 does not deal with supplies made by employer to employees and therefore the same is not relevant for the present purpose. 2.12 On a combined reading of the above-stated provisions, it can be observed that supplies made by the employer to the employee, without consideration, would qualify as supply under Section 7(1) of the CGST Act. only if it is made in the course or furtherance of business. 2.13 Thus, a supply of service by the employer to the employee would not qualify as supply of goods or services if it is not mode in the c....
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....as the insurance company which was providing insurance services. Further, the AAR held that the applicant was not even registered as an insurance company. Hence, the recovery of 50% premium amount from the employees cannot be treated as amount paid for rendering insurance service to the employees. 2.19 The ratio laid down in aforesaid case of POSCO India Pune Processing Center Private Limited has been reiterated by Maharashtra AAR in the case of Jotun India Private Limited reported at 2019 (29) G.S.T.L. 778 wherein the applicant was a manufacturer, supplier and exporter of paints and powder coatings and had introduced an optional parental insurance scheme for employees' parents and in case an employee opted far the scheme then the applicant recovered 50% of the premium amount from the salary of the employee. The AAR held that applicant assessee was not engaged in the business of providing insurance services and it was not mandatory for the applicant assessee to provide insurance coverage to its employees under any law for the time being in force. Therefore, non-provision of parental insurance coverage would not affect applicant's business by any means. Hence, recovery of p....
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....DISCUSSIONS AND FINDINGS: 5.1 We have gone through the facts of the case, documents on record, written and oral contentions made by the applicant at the time of preliminary as well as the final hearings and written submissions made by the jurisdictional officer. 5.2 The applicant has submitted that they are engaged in power generation, transmission and distribution to the customers. Further, as a part of employee policy, the applicant provides certain facilities to its employees such as insurance, transport, telephone expenses, canteen, etc. 5.3 We have gone through the relevant documents submitted on record by the applicant and it is observed that the applicant has an arrangement with New India Assurance Co. Ltd for providing group insurance (Mediclaim) cover to their employees for which a master insurance policy is issued by the insurance company to the applicant. Further, the applicant has also formulated a Health and Wellness Policy' wherein, employees are given an option to opt for an additional insurance for themselves as well as for their parents, for which the applicant company has taken a saparate top-up insurance and Parental Insurance from the insurance company. A....
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.... or (b) a supply of services and not as a supply of goods 5.6 Thus, in order to constitute a 'supply', the following elements are required to be satisfied: (i) there should be supply of "goods" and / or services"; (ii) supply is for a "consideration"; (iii) supply is made "in the course or furtherance of business": 5.7 From the above, it is clear that any activity done against consideration is treated as supply however, such an activity must be in the course of business or for the furtherance of business. 5.8 The term "in the course of business" or "furtherance of business" is not defined under CGST Act. However, the term business has been defined in Section 2(17) of the CGST Act, 2017 which is reproduced below for ready reference: "business" includes (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) ....